The French oil major Total has signed a US$14.9 billion senior debt financing agreement for its huge liquefied natural gas (LNG) project in Mozambique, the biggest project financing ever in Africa, the firm has said.
The project includes the development of the Golfinho and Atum natural gas fields in the Offshore Area 1 concession and the construction of a two-train liquefaction plant with a capacity of 13.1 million tonnes per year, Total said.
Jean-Pierre Sbraire, chief financial officer of Total, said the signing, which secures the majority of the project’s total investment of $20 billion, shows financial institutions have confidence in the long-term future of LNG in Mozambique.
Mozambique LNG is one of several projects being developed in the country’s northernmost province of Cabo Delgado after one of the biggest gas finds in a decade off its coast. Together, the projects are worth some $60 billion.
Total’s rival ExxonMobil delayed the final investment decision on its nearby Rovuma LNG gas project because of the coronavirus pandemic, and Mozambique expects the decision next year.
Mozambique LNG’s project financing includes direct and covered loans from eight export credit agencies (ECAs), 19 commercial bank facilities, and a loan from the African Development Bank, Total said in a statement.
UK Export Finance (UKEF) was among the ECAs contributing to the financing, along with the Export-Import Bank of the United States, Italy’s SACE, the Netherlands’ Atradius, the Export Credit Insurance Corporation of South Africa, Japan Bank for International Co-operation, Nippon Export and Investment Insurance and the Export-Import Bank of Thailand.
Reuters reported last month that UKEF was planning to commit roughly $800 million of funding – a contribution that drew criticism from environmental campaigners who say Britain should not be funding fossil fuel projects.
Sealing the Total project financing is a win for Mozambique’s government as it tackles security challenges.
Cabo Delgado has seen an Islamist insurgency with links to Islamic State gather pace over the past year, and suspected Islamist insurgents attacked a town 60 kilometres (37 miles) south of the gas projects late last month.